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Monday, 14 November 2011

Government for the people - or the Euro?

The economic crisis affecting the Eurozone has now seen off the governments of Burlusconi and Papandreou - evidence, if any were necessary, that every cloud has a silver lining.

I shed no tears for either, but what does concern me is how the economic and political needs of the moment appear to have sidelined democratic values in favour of "stability". In both Greece and Italy incumbent leaders have been replaced with unelected economists as fears of pending financial collapse have led to faith being put in the apparent expertise of Mario Monti and Lucas Papademos, rather than in the electorate, in order to appease the markets - and to save the Euro.

So far, the move seems to have offered the markets some reassurance. It is, of course, vital that such reassurance is given if the Eurozone is to survive the current crisis. However, the notion that only political authoritarianism can provide economic stability is facile and the assertion that democracy somehow acts as an impediment to economic growth both insulting and seriously mistaken.

It could also be pointed out that, if the recession has proved anything, it is that the "wisdom" of the markets is questionable. They do not always know what is best and, although the influence of market confidence should not be underestimated, the democratic structures and practices of the EU and its member states should not be dictated in this way. International markets, after all, are by nature reactionary rather than progressive and have greater ability to undermine the Euro's future than any one of the governments of the 17 countries making up the Eurozone; the economic situation actually requires more democracy and greater imagination regarding potential solutions, not a stronger hand from proponents of the status quo.

Greece's new Prime Minister, Papademos, is seen as something of a potential saviour on account of his experience as Vice-President of the European Central Bank and as a former governor of the Bank of Greece who championed Greece's transition to the Euro. I am far from an economic expert but I would struggle to put my faith in a man who has consistently promoted the single currency in spite of the evidence that having 17 different economies being forced into mechanism with a single interest rate would prove hugely damaging in the long term for nations such as Greece. But then, his appointment owes very little to the particular concerns of Greeks and everything to the needs of his pet project - the ailing Euro.

Italy's new Prime Minister is Mario Monti, already being applauded as "Super Mario". Here is another Europhile economist whose love of the Euro defies economic logic. A former European Commissioner, he appears to have had a more interesting career than his Greek counterpart, having been involved in bringing anti-monopoly charges against Bill Gates' Microsoft and an influential voice calling for facilitating further European integration. Monti's experiences and achievements suggest he is more suited to politics than Papademos, but once the initial relief that has greeted their respective appointments eases off, there will inevitably be concerns about the lack of democratic legitimacy.

The fact that Monti was only appointed a lifetime senator on Wednesday with the express purpose of replacing Berlusconi speaks volumes about Italy's commitment to democratic values. However serious the economic situation becomes, I can not foresee any circumstances in which Mervyn King would be given a life peerage in advance of taking the reins from David Cameron. Democracy demands better than the appointment and promotion of technocrats simply to reassure the markets and aid the political ambitions of Angela Merkel.

The Italian and Greek electorates also deserve better. I am not calling for imminent elections, which would also be unsettling and destabilising to economic progress. But Papademos and Monti are where they are because Europe trusts them. While the appointments may see off the immediate crisis, there will almost certainly be difficulties further down the line when governments lacking a democratic mandate and listening only to the logic of the markets have to implement unpopular reforms.

Make no mistake - this is government for the Euro, not the people of Greece and Italy. A cynic might go as far as to suggest this is government by the EU, for the EU. Monti and Papademos should not be perceived as economic saviours ushering in a new era of consensual politics, but representatives of the elite European Order, an ancien regime striving to maintain its own significance and salvage something from its misguided vision for European economic and fiscal unity.

If Monti and Papdemos can bring some calm to European politics then to an extent the appointments will have been justified. However, the willingness to dispose of democratic principles is thoroughly disturbing and could yet come back to bite - especially if the necessary bailout and austerity programmes fail to have the desired effects.

1 comment:

Andrew said...

French speakers may be interested in this link:

http://www.lemonde.fr/europe/article/2011/11/14/goldman-sachs-le-trait-d-union-entre-mario-draghi-mario-monti-et-lucas-papademos_1603675_3214.html#ens_id=1603680